I remember back when I went to real estate school, when the instructor was explaining contracts and listings he said "just mark cash and conventional, nobody ever uses FHA or VA you won't get the owner to accept it". Times sure have changed, today with large number of distressed properties either short sale or banked owned often times the prior owner has left with appliance in hand or the property entered into a state of disrepair as the owner worked their way through the default process.
So, in comes the perfect prospect and the house is a great value, destressed and all, but the prospective buyer doesn't have the necessary money to make the repairs or purchase new appliances once they move it.....we'll that's were a 203K FHA guaranteed loan comes in. The buyer can finance based on the future value of the property with the new appliances, repairs, etc. As the items are installed the funds are pulled from closing the escrow account. In many cases these homes after repairs will appraise at values that are well in excess of their loans. Below is a little video I made for the office explaining 203K loan guarantees.